“Wisdom” AMM, achieves continuous liquidity for event betting. The protocol supports various on-chain betting markets for games, sports betting, cryptocurrencies, and other activity markets.
With the emergence of billion-dollar DeFi protocols on Solana, now is the perfect time to build infrastructure and tools for these DeFi protocols.
Alpha suggestions for builders:
OEV: A subset of MEV, Oracle Extractable Value (OEV) refers to the state inconsistency that applications rely on Oracle updates for arbitrageurs or liquidators to exploit. As described by multicoin, there is an opportunity for applications to capture OEV.
DeFi Infrastructure as a Service (Infra as a Service): Several protocols like Aave/Compound have been forked multiple times; Solana is no exception, with protocols forking Solana Lab’s reference implementation. There are significant costs involved in development, auditing, and maintenance. A standardized and sustainable development company can be established to provide “plug-and-play DeFi protocols” – it can also be seen as a “Metaplex for DeFi.” Rari Capital (now defunct) had a similar vision and built treasury infrastructure. One accomplishment was building equivalent infrastructure for Solana like ERC-4626 and leveraging Solana’s yield farming by providing services to DeFi projects.
Risk management organization: This can be built as a risk DAO or advisory committee to conduct research and risk analysis for DeFi protocols. These entities can release public “risk analysis dashboards” with key metrics for the Solana ecosystem and provide paid research, risk assessment frameworks, and risk rating services to DeFi projects.
Bribery aggregator or marketplace: In the EVM, Curve Finance allows its token holders to decide how much token incentive to allocate to each pool they have. This creates a dynamic where projects can “bribe” token holders to vote for pools that include their tokens. Votium Protocol aggregates these bribes and automatically represents token holders’ voting power to maximize the incentives received. Having an aggregator makes it more convenient to coordinate activities between bribers and voters and leads to greater market efficiency. This can be applied to Solana in:
– LST, transferring ownership directly to validators through governance tokens.
– Jupiter LFG Launchpad, where projects can bribe their voters and provide token distribution as a reward.
DeFi privacy: Privacy has found product-market fit in unexpected places, such as airdrops. For example, centralized exchanges are also used by whales to anonymize their trades, hence protocols like Elusiv are heavily used.
Meme coins are cultural in the finance space. Their value purely comes from attention and social consensus. We may be in a meme coin supercycle with Solana as the frontend.
Furthermore, DeFi applications will become more social. We have already seen some early trends:
– Purchasing through Telegram bots, such as Bonkbot with a daily trading volume of $250 million.
– Projects like Zeta or Kamino having public leaderboards.
The next frontend for DEXes is likely not Jupiter-style exchange interfaces but rather live streaming platforms where creators and viewers bet together, social sources with integrated trading, or other networked states.
UI layer composability: Telegram bots make DEX UI composable. Previously, people would find information somewhere on the internet (X, Reddit, news, Telegram groups, etc.) and then navigate to a separate UI to trade (e.g., Drift, Binance, Coinbase, etc.). Telegram bots bring trading to Telegram, where people are already congregating, socializing, and exchanging information.
Alpha suggestions for builders:
– Continuous prediction markets supported by meme coins:
Existing prediction markets like Polymarket are binary and discrete, limiting the upside. Most people want continuous, unlimited upside. A native crypto prediction market can actually be a meme coin (e.g., $BIDEN, $TRUMP). People can create a niche platform dedicated to trading meme coins (e.g., a political platform where all political meme coins can be traded and predictions on the winners can be made). MetaDAO is an example of vertical and continuous prediction markets limited to governance.
Meme coin frontend: The user experience for meme coin trading is still not optimal: people need to discover meme coins, check all the details on platforms like Birdeye or DEXscreener, and then trade on Jupiter, and for many early meme coins, wallets don’t even have basic support. People can simply create a website like Birdeye but specifically for meme coins, more social where big V bloggers can hype and copy trades from each other. Pump.fun is another interesting platform where people can join meme coins very early (up to $69k market cap). Another adjacent idea worth exploring is a DEX specifically tailored for meme coins (currently Raydium, but the experience is not optimal).
Vertical DEXes: More experimentation with DEX designs targeting specific use cases like meme coins or LST. For example, Sanctum’s Infinity is essentially an automated market maker for LST.
Platforms can create new products. Amazon is a platform, and a brand on Amazon is a product. The launch of Uniswap v4 hooks marks the first platform moment for DeFi, allowing builders to launch their products on top of these protocols. Not just Uniswap, all blue-chip DeFi protocols like Jupiter are starting to build ecosystems on top of them.
Project Serum (now Openbook) serves as a platform showcasing ecosystem construction with over 30 projects developing on it. Platformization of Solana DeFi projects is still in its early stages but is expected to increase in the coming months. For builders, identifying such protocols, strategically positioning, and becoming early participants in the ecosystem is advantageous.
Alpha suggestions for builders:
– Jupiter: Originally an aggregator, Jupiter is rapidly evolving into an ecosystem. Adrastea is a good example as it provides leverage on JLP.
– Drift: The largest sustainable DEX on Solana. Circuit Trade provides market-making treasury functionality for Drift DEX and can develop similar products around DLP.
– Phoenix: Although still in its early stages, Phoenix has the potential to develop into a comprehensive ecosystem as an order book. For example, Root Exchange built on Phoenix offers enhanced limit orders.
– Structured products and strategy treasuries provide clear opportunities for the development of more products on these platforms. While transitioning to platforms is a long-term effort, it greatly benefits value accrual (which is why Layer 1/Layer 2 solutions have significantly higher value than applications) and shifts the responsibility of revenue generation to the applications built on top. This also benefits token holders of platform protocols.
In the crypto space, attention is scarce, and aggregators command it. Whether it’s DEX aggregators (like Jupiter/1inch), bridging aggregators (like Jumper/Bungee), or chain aggregators (like Polygon), they have become new, attractive narratives.
The principle is simple: aggregators control demand and capture user attention. While they currently haven’t accumulated much value (most are not charging fees), it’s likely that their abstract underlying protocols will soon provide fees or revenue sharing to them for priority or maintaining uniqueness (similar to brands paying Amazon for advertising).
Interfaces add additional value on top of the underlying protocols they facilitate. Interfaces can win the battle of customer acquisition and capture value through additional tools like UniswapX or Jupiter’s DCA tool.
In fact, Solana has one of the most powerful aggregators, with Jupiter leading the way, and other aggregators like Flexlend aggregating yield.
Alpha suggestions for builders:
Aggregation opportunities include:
– Yield aggregators
– Perpetual aggregators
– Meme coin aggregators
– All-in-one DeFi aggregators like Instadapp for leverage, refinancing, and position migration
While there seems to be a blurry line between “platforms” and “aggregators,” the difference is that aggregators are frontends, while platforms are the foundation upon which products are built. A protocol can be both, and Jupiter is an example.
Now is the time to build new protocols on Solana. While the EVM can serve as inspiration, protocols should focus on core design innovation, participate in research discussions, and build true OPOS like Sanctum or Phoenix. We will differentiate Solana DeFi from Ethereum, draw inspiration from TradFi, and explore what can be built on-chain with high capital velocity and speculation.
Infrastructure has finally reached a point where it can handle large-scale activity. Many previously failed DeFi projects due to being too early are now becoming viable again. It is exciting to see how this will develop in the coming years.
Related Reports
Are “meme presales” dead on Solana amidst frequent rug pulls?
What did SOL get right after the chaos? Conversation with Foundation President Lily Liu: What’s next for Solana?
Solana’s market cap briefly surpasses SoftBank, Mercedes-Benz! Jupiter’s trading volume exceeds $1 billion, surpassing Uniswap.